Reasons Subscription Websites can be a Wealth of Success
Subscription websites don’t need innumerable subscribers to be successful. Many of you would be surprised to know that quite a few of these subscription websites have earned profits with only a few hundred customers.
Let us evaluate the reasons for their success:
1. Low Running Cost – Most of these subscription websites keep their expenditure to a minimum. Their staff strength is limited with each one doing multiple jobs. You would be surprised to know t...
...hat some sites have staff of only 2 to 4 people. Their office space is also inexpensive. Many a times they even work from home.
With such limited and controlled expenditure is it any wonder that they don’t need much income to register a profit. Many subscription websites have as low running cost, as £250 per month, discounting salaries etc.
If the website is able to get a few subscribers, it is on its way and can cover its cost. Most of the subscription websites aim to engage approximately 30 subscribers every month. This wouldn’t be the case if the running cost were more with a big infrastructure companies such as Salon.com, with a number of employees who further require facilities like office space, training, employee benefits etc. In such cases since the overheads are so huge, these companies would require hundreds of sales to break even and maintain the sites. Simply 30-40 subscribers would not be good enough.
2. Limited Target Audience – The subscription websites that are able to cater to a specific group of people are more successful than those who try to serve all. The idea is to be master of the trade rather than being the jack-of-all-trades and master of none. If they have a limited audience then they can look after all of them, catering to all the customers' individual needs.
For example in the case of Salon.com which tried to convert all its visitors into subscribers to generate profits, but failed. One of the reasons was that the visitors refused to pay for the information that was earlier available to them for free. Moreover, it was generic information rather then specific or concrete information.
3. Premium Subscription fee – For the subscription websites to function and prosper they need to make sure that they have the right kind of subscription fee which is neither cheap nor expensive.
This is not to say that subscription websites with an expensive fee are not successful. There are examples of subscription websites charging as much as £2,500 a year and still being successful. The idea is that whatever the subscription fee be, the subscribers should feel that the membership is worth every penny they are being charged.
Not all subscription sites charge a hefty amount. Usually you can have subscription of a good website for around £195 a year on an average. While, the cheaper ones can charge around £89.95 a year depending on the services and or the content they are selling.
The idea is to provide quality service to a select group of people who are ready to pay the price and understand its worth. This way a subscription website is able to generate the right kind of revenues to stay afloat and make profits.
Even with say, 500 subscribers paying £195 a subscription website can generate nice profits. However, a company like Salon.com, with their very high overhead costs would need thousands of subscribers to just to stay afloat.
4. Outsourcing – Another factor, which allows subscription websites to generate profits with limited subscribers, is the fact that they outsource some of their jobs.
These subscription websites are smart enough not to undertake the technical jobs themselves. They utilise the services of the commercial website hosting companies available in the market nowadays. Commercially, a website can be hosted for as low as £50 a month.
They realise that if they do these technical jobs themselves then they would also have to bear the cost of maintaining the infrastructure and the staff. Maintaining a full-fledged computer department with technical staff and hardware is an expensive exercise. If you keep technical staff, then you are also compounded with problems, such as training and looking after the requirements of the staff. You can see this in the case of Salon.com who had to mange 100 employees.
Besides this, the other tasks that are outsourced include management and updation of website. They can also use the services of good content publishing software to do these jobs well. With such a software they are neither dependent on outsiders nor do they have to handle their own technical staff.
Therefore, by keeping the running cost low, keeping limited target audience, charging premium subscription fee and outsourcing, your subscription website can stay afloat and even generate profit.
This article was written by Craig Dawber of smarket-associates.com Need advice and guidance with your online business check out the resources found in this website.
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