How to Know When to Give Up (with Niche Sites)

If you’re anything like me, giving up on a goal or project is extremely difficult to do.  You’ve invested a lot of time and probably some money as well, so you’re determined to see it through.  With niche sites, most of the work is already done before you can see whether or not the project is a failure or success, so it’s tricky to determine when, if at all, to quit.

Ironically, failure is an important step to success, so knowing when to quit is extremely important, because it will impact your ultimate success (that is, if you eventually to become successful).

A Note on Profitability

In general, your decision to create and maintain a niche site should be based on its profitability – either current profitability or expected future profitability.

You might ask – “How can I determine this? Couldn’t the site technically earn money forever?” Yes, technically that’s true.  You don’t want to wait around forever to get your money back, however.   After all, if I told you that you could build a site today and recoup your costs in 10 years, would you really feel it’s worth your time to build that site today?  Probably not.

My Criteria

With the micro-niche sites I’m building, in order for me to build a site and continue maintaining it, I want to make sure the site is profitable after one year.  One year is a logical time frame for me, because that’s how long I register my domains for.  The site won’t require any money until year two (when the domain needs to be renewed), so there’s no harm in giving the site one year to become profitable.

Fortunately, you should know if your site will be profitable in a year before you get to the one year mark. I’d guess that in anywhere from 2 to 6 months into the site’s life, you’ll have a pretty good idea of how profitable it’ll be in the near future.

Here’s the cost structure for one of my typical micro-niche sites:

Domain cost (avg. cost, this varies): $8

Initial content cost: $17

SEO/Backlinking cost: $5 (in a future post, I will explain this cost)

Total = $30

[Note: I am excluding hosting costs because all sites are on one host, and this price remains fixed regardless of how many sites I build…on a per site basis, it comes out to a very small amount per month.]

With this cost structure, in order for my site to be profitable after one year, it must earn at least $2.50/month.   As you can see, it doesn’t take much for a micro-niche site like this to become very profitable.

One important note: This “cost structure” doesn’t include one big item – my time.  In this case though, even though my time is valuable, I am assuming that if I weren’t building a niche site, I’d be watching TV or some other non-income producing activity.

Okay, So When Do You Give Up?

This is where things get interesting.  Let’s say, after 1 year, your site only earns $25.  By our criteria above, we’ve failed, because the site wasn’t profitable after one year.

However, assuming the site requires no additional work to maintain, should we give up on it? Not necessarily.  If you believe your site will also earn $25 in year two, you shouldn’t give up. Although this isn’t a lot of money, the site will only require you to spend $10 or so to renew the domain.  What this means is, your site will be profitable in year 2.

If you earn $25 in year 2, and only spent $10 to maintain the site in year 2, your decision has earned you a profit of $15, without requiring any additional work.

When making the decision to give up, you have to ignore the factors that won’t change – i.e. the money you’ve already put into the project, that you can’t get back.  (For the economics students out there, these are called “sunk costs.”) Your decision needs to be based on future costs and future expected earnings.

Figuring out whether or not to put more time into a site (i.e. adding content or backlinks) is a bit trickier, since it’s not purely a mathematical question.  If, after a year, your site has earned less than $30 (using my example above –  keep in mind this amount could be different for you), and you’ve added a decent amount of content and made a good effort with SEO/backlinks, your time is probably better spent finding a new keyword and building a new site.

But Wait…It’s Still Not That Simple

You didn’t think it was this “black and white,” did you?  Of course not! :)  If you’re considering giving up on your site, you have to also ask why your site is failing (or will potentially fail).  There are a few main situations you’ll see:

1) The site’s ranking isn’t high enough for your target keyword – If you’ve done a fair amount of SEO work and the site isn’t ranking, and you’ve passed your “time to quit” threshold (for me, the one year mark), I would give up and spend your efforts elsewhere.  We all know that backlinking is perhaps the most time consuming part of building a niche site, so if you’re not earning due to ranking, it’s probably best to move on.

2) No one is visiting the site – You’re confused.  Your site is ranking in the top 5 for your targeted keyword, yet very few people are visiting your site.  This is a classic case of poor keyword research (or perhaps you picked a keyword that was seasonal or based on a current event that people no longer care about).  If your target keyword isn’t bringing you traffic, it’s time to give up.  And make sure to do better research next time.

3) You’re getting lots of traffic but earning very little – This situation leaves room for hope.  Where there are visitors, there is potential for income.  Have you tested different ad placements? Have you tried a different (more attractive) theme?  Perhaps you’re using AdSense to monetize the site, but because it’s a product-based niche, the site would be better monetized with Amazon affiliate links.   The bottom line is, if you’re receiving good traffic but not earning much, you should first find a way to better monetize that traffic before giving up.

Conclusion

If you’re struggling to earn money with your niche sites, hopefully this post will help you determine if and/or when to give up on your site.  Remember, failure is an integral part of success.  If you can identify failure better (or more quickly), you’re one step closer to success.  And each time you fail and give up, be sure to know why.  That’s valuable information for future projects.

What do you think? How have you determined when to give up, especially with niche sites?

Twitter Digg Delicious Stumbleupon Technorati Facebook Email
Connect with Eric Gati on Google+.

32 Responses to “How to Know When to Give Up (with Niche Sites)”

  1. Do you think a site that thin and with only $5 of links will hang around page one (or where it can be found by searchers) for a year?

    I think those days are over now but I’d love to be proven wrong!
    Joe recently posted… Monthly Round-up: November 2011

    [Reply]

    Eric G. Reply:

    In most cases, I think you’re right. However, I think if you do your keyword research well, you can find sites with competition so low that it’s possible to rank with relatively little effort.

    In a future post, I will explain how I get to $5/site, as that is somewhat misleading. (Hint: I’m taking the total monthly cost of some backlink services I use and dividing it by the # of sites I create per month.)

    No guarantees it will work…but time will tell.

    [Reply]

  2. Nice post Eric!
    I do agree with you that 1 year is the best time frame to analyze the website and make a decision regarding its future.

    The other good question is how to find out when it’s time to invest more in the niche site. Sometime we can see good results in 2-3 months, sometime in 6-8 months, and this is the time to invest more time and perhaps money in creating more content and more backlinks. So what do you think about that? Time to quit and time to invest more are two sides of a story.

    [Reply]

    Eric G. Reply:

    Very true, Mike, that’s a good question to ask as well. For me, I think the 3-4 month mark is a good time to determine whether or not to invest more time/money. It’ll depend on the site of course, but for a micro-niche site, you should know by that point.

    [Reply]

  3. Actually, I already gave up some of my sites because it wasn’t earning at all…I stopped developing them because I lost my track and my determination to continue…

    [Reply]

    Eric G. Reply:

    Unfortunately, niche sites (especially micro-niche sites) are somewhat of a numbers game – you might create 10, and 3 might succeed while 7 fail. Hopefully, the 3 successes earn enough to make up for the 7 failures. Just need to keep pushing through it and working hard!

    [Reply]

  4. a year is a reasonable expectation in my experience. that said, the timeline is mainly predicated on the amount of work you put in and at the speed you do it at. ideally, you spend three months on every aspect of the site and just let it sit. over time your efforts kick-in and by month 12 you decide whether it’s a success or not

    [Reply]

    Eric G. Reply:

    Definitely agree – thanks for the comment Sunil!

    [Reply]

  5. Eric,

    For me I will not give up per-say, but I will put my time into other projects. I will evaluate every niche site I do after 2 months to see where it stands and if it is not earning at least $1 per day, then I move on. I stick with that same number for all my sites because so far it has been working like a charm.
    Adam recently posted… Earn Money Online From Textbroker

    [Reply]

    Eric G. Reply:

    Good to hear that’s been working for you. To me, $1/day is a bit too high as an amount for me to give up on anything that falls below it.

    $1/day is $365 per year…and if you account for what the site costs (in my case, about $30), that’s massive profit for what is probably a few hours of work at most. And that’s just for year 1…

    To me, even $0.33/day would be great (that’s $120 a year). To each his own though – I’m sure at the end of it all, you’re left with a collection of highly profitable sites, which is awesome. Thanks for the comment, Adam!

    [Reply]

  6. Well I think positively with anything that I do, but sometimes niche sites are just tough to boost.
    Mark@The Elevation Group Review recently posted… FB X Tab Review-MAJOR SCREW-UP?-Read What Daniel Tan Says…

    [Reply]

    Eric G. Reply:

    Yep, unfortunately they can’t all be winners. You just need to be positive and keep working hard, and hopefully the successful sites outweigh the failures.

    [Reply]

  7. I had one site that just didn’t feel right after I’ve put it online. Earnings were low (I blame it on the niche :p) and after putting a lot of work in it (including a complete redesign) I just decided to quit the project. I managed to sell the domainname for a small amount to ease the pain :) It had very good rankings so this was wise to do.

    I basically ask myself the question: “Will I have any fun maintaining this website in the future?” ‘Fun’ can come in many ways, including the profits. For me, this is the question to ask myself to determine whether I continue on a project or not.
    Kris recently posted… Drie redenen waarom ik prijzenklikker niet meer aanraad:

    [Reply]

    Eric G. Reply:

    That’s a great point Kris – in my post, I know I only focused on the monetary decision of whether or not to give up on a project. To me, money is really the only goal for my micro-niche sites (as greedy as that sounds). I know that in order to make money, I need to provide valuable content, but I don’t derive any enjoyment from that part of the project, if I’m being completely honest.

    But you are absolutely right – if you are having fun with a site, even if it’s not too profitable, it may still be worth keeping.

    [Reply]

  8. My blog has been doing well. At this level the earnings have been quite acceptable. I will quit when I cant post any articles.

    [Reply]

    Eric G. Reply:

    Sounds like a plan – keep up the good work!

    [Reply]

  9. Hey Great post,
    But i would disagree to you. the point is should we ever thing of quit.
    I go y the quote ” Quitters don’t win”
    mark recently posted… Free Online Surveys Jobs Means Getting Paid To Do Surveys

    [Reply]

    Eric G. Reply:

    Thanks for the comment Mark – while I agree that in the grand scheme of things, you don’t want to be a “quitter”, there are smaller situations along the way where you must accept failure in order to learn, grow, and move onto greater successes. If you dwell too long (i.e. never quit) on something that just isn’t working, you will find it much more difficult to reach success.

    [Reply]

  10. I hope this can really help a lot of people especially me…Thanks!
    Felly recently posted… Great Affiliate Softewares Reviews

    [Reply]

    Eric G. Reply:

    Thanks for the comment Felly!

    [Reply]

  11. 1 year is also the golden mark for me. I have a whole heap of domains that are all due to expire around Jan/Feb next year – I’ll be glad to see the end of them to be honest.

    But yeah, probably as simple as that, if your sites are not paying their way or don’t have some other redeeming feature (e.g. good traffic), then it’s time to let them go and move on to other ventures. The decision to let them go is harder for me though, cause all my niche sites normally get at least x5 (500 word) articles written (cost around $25).

    The only other exception to this rule that comes to mind is some ‘authority sites that I’ve been building. They arent returning income at the moment, but the they have very good long term potential (good content, good cpc, non-branded domains, high search etc). I’ll probably add more content for these in the coming year, and see if that is enough to get them earning in Year 2. If I dont see a return on these guys by end of Year 2, then I’ll definitely have a serious think about letting them go as well.

    Any letting domains go can be refreshing, as it lets you focus on new sites and those that are already performing well!

    Cheers,
    Jay.

    [Reply]

    Eric G. Reply:

    Well said, Jay. And I definitely agree that authority sites get a “longer leash” so to speak, because their success may come slower (but of course, when it does come, the potential is much greater).

    [Reply]

  12. Never give up, time is your friend. As your niche sites age, they will gain traction (as long as you keep adding content). Content addition doesn’t have to be a lot (maybe a short 200-300 word article per year) but needs to be something. That said, it’s important to reprioritize and move low producing sites down the priority ladder (couldn’t agree more with that).

    Another point to consider:
    Statistical significance: A site earning $30/year could just as easily produce $60/year. When dealing with small numbers, be careful not to rule a site out. I have sites that earn $20 in one month and then none the next. Why? Low traffic, high CPC verticals.
    PPC Ian recently posted… Acquisio Acquires ClickEquations

    [Reply]

    Eric G. Reply:

    I definitely understand what you’re saying, Ian. I think sometimes with micro niche sites though, your income ceiling is very low (unless you plan on adding a lot of content and targeting more keywords). If your site is ranking #3 and isn’t profitable, you need to question whether or not it’s worth even renewing the domain (and of course also look into what it would take to go from #3 to #1 – that could make a huge difference too).

    I think being able to prioritize is a very important skill to have. Sometimes you need to decide if you’re better off putting effort into a totally new site vs. trying to resurrect one that has under performed for a year or more.

    Great point about statistical significance, I couldn’t agree more.

    [Reply]

  13. Interesting topic you chose Eric, Actually i never give up for my sites even when they are old and has very less traffic. updating that again and by few changes like Images,title, content it gets traffic again.
    Arjun Rai recently posted… XRF analyzer

    [Reply]

    Eric G. Reply:

    Thanks for the comment, Arjun. You make a very good point – before deciding to give up, you need to first evaluate whether or not there is something you can do to improve the site and turn it from a “loser” to a “winner.”

    [Reply]

    Arjun Rai Reply:

    Thank you Eric :-)
    Arjun Rai recently posted… Scrap Cars

    [Reply]

  14. This is really helpful Eric and you are aware of it…Thank you for being so generous to us then…
    Gianeli recently posted… Videos about Soccer Training Drills

    [Reply]

  15. For the site I’m working on now, if I get to a certain Alexa ranking and I’m still not attaining my financial goals as far as ad network income is concerned, I’m going to scrap the whole project…
    Jeff recently posted… Reindeer Cupcakes That Will Go Down in History

    [Reply]

    Eric G. Reply:

    I can understand that, although personally, I don’t even consider Alexa ranking when trying to determine how well my niche sites are doing. For niche sites, all I care about is traffic and income. For larger, authority sites, I can understand why Alexa ranking would be more important.

    [Reply]

  16. What I find remarkable is the patience and fortitude you guys have in this business. I’m not sure I could wait around an entire year to see if a site could or could not earn more than $30. I realize that you do this with multiple sites at the same time and the rewards for having sites with consistent payouts can be great, but working on a project for whole year without knowing if it will pay off in the end is beyond me. I guess I’m more used to more immediate (relatively speaking) rewards in my line of work.

    [Reply]

    Eric G. Reply:

    Hey Alex, I understand what you mean. It’s a grind when you think about one individual site and what it takes to succeed, which is why it’s much more motivating to take a step back and look at the big picture (all of your projects, collectively). Another thing that keeps me going is that I spend most of my time working in my “9 to 5” job, so I’m not relying on relatively quick results with my niche sites. Patience is huge in this business – some people will find success very quickly, but most will need to keep grinding away while the results take awhile to catch up.

    [Reply]

Leave a Reply

*

CommentLuv badge

Subscribe to my awesome newsletter and receive The Ultimate Backlink Tracker for free! (Don't worry, I'll respect your privacy.)



The owner of this website, Eric, is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking http://www.my4hrworkweek.com to Amazon properties including, but not limited to, amazon.com, endless.com, myhabit.com, smallparts.com, or amazonwireless.com.