…how much is it costing you?

Why is it that a company generating, for example, $1m in revenue can go bust?

Because it’s costing them, for example, $2m to generate customers to buy their $50 product.

If your traffic costs are bigger than your revenue intake, you can’t sustain the business operation. You’re losing money even though you’re generating substantial revenue.

You might not be at this financial level but the principle is the same.

That includes if you’re generating free traffic.

Free traffic is not free of cost. It costs you time to do whatever you do to produce it.

Let’s say you’re making $5000 a month in revenue. How much is that a day? Divided by 30 that gives you $166 in revenue on average each day of a month.

Let’s say you’re working 8 hours a day. That makes your working time worth $20 an hour on your working day.

If you’re working 4 hours a day generating traffic, that means it’s costing you $80 a day to do so. So you need to be selling products worth $80 a day to cover your traffic time cost in revenue generated.

These figures could rise exponentially if you were paying for traffic, and especially if that traffic was not producing enough customers. And, of course, there are other costs – we’re just focusing on traffic costs here.

Also, your traffic costs are related to your product prices.

You might control your traffic costs effectively but then not be selling a product at a high enough price to cover those costs, and make a profit.

The word “free” is widely used across the internet. But in reality nothing is ever free.

Your traffic to your website is not free. As a customer, when you sign up to a list it costs you your email address. If you read free information on a website, it costs you time.

Work out your costs and know the direction you’re going in.