It's the TRAFFIC...Stupid!
View this photo It's nothing more than the famous shell game and your job is to be trained on what to look for.
There are 3 shells. Shell 'A' contains TARGETED TRAFFIC. Shell 'B' contains UNTARGETED TRAFFIC and Shell 'C' is hocus pocus NO TRAFFIC at all or the quality is so bad it has the same result.
Let's say you buy 1000 visitors and you are willing to pay 10 cents each for a $100 investment. With group 'A' you can close 10 sales and you make $100 per sale. A closing ratio of 1 in 100. You made $1000. With Group 'B' you made 1 sale. A closing ratio of 1 in 1000 so you broke even but you made a customer who hopefully return and that of course has value. Group 'C' of course produced nothing and if you buy it 10 more times you will have nothing 10 more times. Closing ratio is......
So with 'A' your $100 turned into a $1000. RIGHT DIRECTION!
With 'B' you broke even. No direction at all but there could be a CHANCE at some future business.
With 'C' you got the shaft and few even ever know it. So there is ample amounts of 'Shaft' available. Want more? If not....you MUST learn about traffic.
Now this is one side of the equation. The next step is to focus on the website and see if you can increase your closing percentages. If you could tweak it and double the revenue you would create 2 things. Demand for more traffic of equal quality and you would be willing to pay more for it which is why I as a domainer am so interested in this happening. Now be careful. If you buy the traffic under shell 'C' you will be tweaking with no possible way of ever improving it and THAT us why TRAFFIC is the name of the game. Once you truly understand traffic, you can sell virtually anything on the net. So with the widgets.com example yesterday and the traffic illustration today, you shoud be able to clearly see both sides of the equation. If you can see it you can tweak it.
So back to my example....if you double your closing rate and end up with 20 sales and make $2000 for your $100 bill you are likely willing to up that offer and you may up it to the point where you buy as much of that traffic as you can find.
While all that is going on you are still getting the benefit of the customer returning to buy more but you have increased your odds by 20 fold. You are growing your business. You are likely growing your business at the expense of the other guy. And guess what? That is okay!! The bi-product of all this is I have also just given an example of a value of a domain that varies by a HUGE amount when you can match the traffic with the right website. So that is the reason when folks sell a domain based on 'X'....my big question is WHY?
Have a GREAT day!