Several months had gone by and I didn’t see how I would have the money to pay them in the near future and I wasn’t feeling good about the delay. So at the beginning of this month I unintelligently paid that money I couldn’t afford to shell out. Then I get hit with some unexpected charges, the unexpected always happens at the worst time. Isn’t that Murphy’s Law?

So I’m stuck short several thousand to start the month. I figured maybe some creative juices would kick in if I put myself under pressure. A few did, but not enough! I launched a Halloween special to my list selling all my ebooks (5) for just 12 euros. I guess it was like what Internet marketers like to call a fire sale. The courses didn’t sell much anymore anyway. It generated around 2000 euros, about 1700 net after Clickbank takes its cut. Nothing major, but I was happy with the result. Now I’m trying to figure out what else I can cook up.

All of our efforts to recover from the Google Panda update have been in vain. We’ve thrown away a lot of cash trying to recover but Google won’t budge on our main and most important site. It’s got a traffic lockdown on it despite continued link building, fresh content, etc. Even our article directory is starting to grow again, which technically should be the most penalized since it has so much duplicate content.

Well, this is a great challenge for me. I’ve been somewhat comfortable financially for some time, until now. But I feel up to the challenge and I think the whole mess is an opportunity to get me out of a rut.

In the words of the great Winston Churchill:

“The pessimist sees the problems in every opportunity. Whereas the optimist sees the opportunity in every problem”

“Never give in, never give in, never; never; never; never - in nothing, great or small, large or petty - never give in except to convictions of honor and good sense.”

Such great advice can’t be ignored!

Google Panda - He's not as innocent as he looks!

This big hit has taught me once again not to have a business that depends 90% on Google, they can wipe out years of work and investment in a heartbeat. Although we are doubling up SEO effort on the short term because we need to recover some cash flow, in the long term we will work 100% towards offering utility and value to users. Our efforts will be to get a large percent of direct traffic although I cannot realistically say that we will be 100% free of Google.

We are leaving the office to cut expenses and we have also cut down our investment in content. We’re hiring a new programmer starting in September to speed up site improvements and development.

For years, really we have been playing the SEO game, links and content for cash flow. I think we needed a good kick in the rear, because to achieve great results we’re simply going to have to do much better. We have to build something of great value for users, not play to Google’s ranking system for generating income.

Web sites are great for creating cash flow with minimum maintenance. Websites make money usually in one or a variety of the following ways:

• Selling physical products / ecommerce – EBay is the pioneer of online selling but there are millions of stores, large, small and tiny on the Internet.  The best strategy for a small timer is to pick a very narrow niche and specialize in it. With access to the entire world through the Internet you can sell a large amount of a very specialized product, what is commonly referred to as the ‘long tail’.
• Selling digital products – Some online marketing specialist make a killing selling educational information products, software and other digital products. If you can sell to a market the margins are huge as there is no cost of physical production or delivery.
• Promoting affiliate products – This is the crossover between advertising and selling. You promote other people’s products, physical or digital, and receive commissions on sales.
• AdSense and contextual advertising – This is the easiest way to start generating income from a site but it’s usually not the most profitable. The general strategy here is to build as much content as possible to capture search visitors, place AdSense and other automatic ad placement software  and grow clicks on ads.
• Banner and direct ads – Larger websites can make good income selling direct ad and link placements. This can be more profitable than AdSense because it cuts out the middleman.
• Directory listings – Some types of sites charge a monthly fee for being listed in their directory or listings of business and services
• Subscription payments – Websites with special services can charge a subscription payment for using private areas or special paid options. Often the site will offer a free version of their service and a bonus paid version.

These are the most common ways how Web sites make money.

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Naming names of gurus and famous people and books seems to help grab some visits. I want to use as much ‘timeless’ discussion as possible, not topics that will no longer be searched for after current circumstances fade away.

I had never bothered much building links. Some of that was done by my step-father years ago when we started the site which gave us a great start, but since he stopped over 9 years ago I never bothered with it. So I decided to look for someone to build links to the site.

This was my very first full time hiring of a ‘virtual employee’. I decided on hiring a fellow from India who had been bartering with me over the cost of a link on my Website for his client based in the UK. He seemed interested in more work and I was impressed with his negotiating. So I hired him on a trial basis to work 40 hours per week out of his house and I paid him exactly what he asked me for.

It was not easy! I had a terribly hard time trusting him and expected to see more links on his reports. Later I realized that it takes time to plan, search, setup content, etc. At one point, I actually attempted to fire him but there was so much conviction in his response that I changed my mind. Shortly afterwards traffic to the site started to grow again, his work was taking effect.

It was roughly 6 months after starting the link building when traffic started going up and Google still behaves the same today. It starts counting inbound links roughly 5-6 months after it first detects them. At that time we had around 2500 visitors per day, now almost 4 years later the site is hitting 13000 visitors per day  and its earning have more than tripled. Aside from link building some time and money has been spent on site improvements, but not much, and some on content.

Fixed monthly expense:

• $300 new content – outsourced to Philippines
• $700 link building
• A small amount of work done internally to place content

Initial monthly site ads earnings €2000/month

Current monthly site ads earnings: €6600/month

Add earnings keep going up monthly yet fixed cost is the same. That’s the power of virtual real estate when done right. By done right I mean you’re actually trying to make a good site with good content or services. So many people advertise get rich quick crap when it comes to AdSense trying to trick search engines. This stuff is useless, ads no value and is always short term.

The only measurement I can make is to measure CPC, or cost per click to see if I’m receiving more euros for the same amount of clicks.

So let’s see for this Website:

March 22 – April 22

Overall clics: 28,851

Overall earnings: €6,238.56

Cost per click / Pay per click: 21.6 euro cents

April 22 – May 22

Overall clics: 29,137

Overall earnings: €6,623,74

Cost per click / Pay per click: 22.7 euro cents

There  has been a 0.95% increase in payout. Unfortunately, Its a very small difference and could have nothing to do with the increased value of the dollar.

About a month ago I purchased some PLR English articles to put together into Spanish ebooks. At this particular site I had to buy points instead of paying for a product directly so I had extra points to spend after purchasing the article packages I wanted. So I bought an article pack on debt with the leftover points.

Since the article pack must have already been bought and posted on another site it wouldn’t have much search engine/traffic value for me to post as is. I sent the articles to my writer to modify them slightly. He charged me about $2 per article to modify them so they couldn’t be detected by Google as duplicate content. I posted them here on the blog to put them to use as fresh content. I think it was pretty obvious I didn’t write them.

This is a way to get content fairly cheap. In terms of normal articles, I get good quality articles for only $5 each.

When you are running a more serious operation you might want to consider hiring some people to work in-house with you to make the developing process smoother.

The easiest types of job to outsource are:

• Writing
• Link building
• Customer service

Depending on the type of online business you are running it’s more comfortable to some development interacting directly on:

• Programming
• Design
• Marketing

Explaining details of design and programming functionality is much easier when the person is sitting next you. If you are building a large portal or a user interactive Website it’s better to be together in the same location.

Marketing is more of a middle ground. You can outsource it but if you have it in-house it’s easier to put your brains together and be creative with it.

As I’m now writing there is an e-mail being sent out to my 16000 subscribers promoting an affiliate product in the online money making niche in Spanish. It could print somewhere between $300 and $500 dollars from a Clickbank product. It’s not a huge amount but it’s a good payout for 10 minutes of writing. (At least that will cover our real estate losses for a few months!)

Of course I don’t just promote stuff on my mailing list. There is a very long auto-responder of messages lined up of content I wrote to teach people. Now and then I add to the cue of messages or send out a blast with a freebie or a promotion. The point is I give as much value as I can for free but I also sell and make offers.

For a long time I didn’t make many offers. I just put out free material but then I realized that the people who liked reading what I had to say would stay on no matter how many offers I sent out and the people who are bothered by the offers won’t buy anything anyway, so what good is it to have them on my list?

If you have a Website and you don’t have a list you’re missing out the opportunity to ‘print money’ on a regular basis.

Outsourcing to countries where your money is worth a lot more where they are located is a win/win for you and the worker. They make more money where they live and you pay much less than you would have to in your own country. (If you live in a western country)  Not to mention, people in the east tend to work harder and appreciate more having work. They probably have less of an entitlement attitude.

The bad side of this of course is that there is less work for local workers in your own country. There is a lot of debate about this, understandably, but I have to admit it would have been much harder for me to have gotten my online business going if I had to pay a local salary in Spain. In fact, it would take a long time to make progress and generate enough money to pay social security, tax and wages for employees. So for now my team is completely virtual, I am the only one on salary. Maybe in the future that will change but it’s the best I can do for now.

Here is how my internet virtual team breaks down:

South America

• Small business in Colombia provides part time programming, 1 full time link builder (for Spanish sites), and another helper who attends clients (from ebook sales), affiliates and emails to one of my accounts. He also builds link and does miscellaneous tasks in his free time.
• News writer for one of my sites who resides in Chile. She only develops a few news articles per week.

Spain

• Family relative who inputs data for one Website and manages paid sponsors.

Asia

• Small business in India who manages link building for English sites. I have two full time link builders here.
• Small business in Philippines who manages some English content for one of my sites and also English promo content. Pay is by articles (instead of hours).
• Full time programmer in Indonesia.

Every time I mention ‘small business’ these were people who did everything themselves when we first started working together and started hiring other people to help out as they got more work and clients.

¿How did I find them?

My Colombian friend I met online because he asked me for a free copy of an ebook I translated. Since he was a programmer I told him he could do some work in exchange for the book. He continued to work for me for a while and then started hiring his own programmers and other employees.

I found my Spanish news writer by sending out a message to my mailing list (from that site). It was tough because I got hundreds of responses from interested people and several that were professional. I took my pick and got lucky.

I found my programmer from Indonesia from advertising the job on different sites. Not sure which one he found the ad on (Maybe phpjobs.com). But I got lucky because he does a very good job.

I found my first link builder from India because he was negotiating links on my site for his client. He negotiated his butt off to save his client a few dollars! I was thinking if getting a link builder at the time so I offered him a job. He quit his other job and started working for me.

I am currently having an ebook translated by someone in Argentina who I found through elance.com. We’ll see how that goes, but she could become a new member of the team if it goes well.

The great thing about virtual employees/freelance is that you can all work together from anywhere and you don’t have to meet in the office.  The best thing before choosing anyone is to first test them. Instead of just reviewing resumes, interviewing or whatever a normal company does, send the person a temporary project or two and see how they do. If they do really well and seem highly reliable then hire them.