Spending too much can ruin your chances of making money online

make money online with ivanka trumpGiving out free stuff is a great way to promote your blog. It’s a great way to promote just about anything. It creates buzz and makes it fun for you and your readers. As most of you already know, i’m a big fan of this marketing tactic. I’m always giving out free stuff like Ipods, Cash, and domains. I also see a lot of other bloggers doing the same thing. It’s great for blogging but you better set limits for yourself or you might end up in the poor bloghouse.

Every once in a while, i’ll come across a random blog that’s giving away something huge. Like a Macbook laptop or something like that. I get the stats on that blog and start scratching my head. Why is this blogger giving out something that he can’t afford?

I think it has to do with the fact that blogging doesn’t cost any money. If you set up a small retail operation, it’ll cost you at least $2000/month. You have to pay for rent, utilities, phone, inventory, insurance, employees, workers comp, blah blah blah. It’s a headache. That means that you probably have next to nothing for marketing. But with and internet operation, you don’t have to pay for shit. Even if your site is on a dedicated server, it’ll only cost you a couple hundred a month. You have all of these money left over to use for marketing. I think that’s where most people end up throwing their money away.

If your blog is new and only have a few hundred visits a day, why spend over a thousand dollars for a prize? If you’re blog doesn’t make a thousand dollars, why give it away to one of your newbie readers? It’s just bad business. You’re just showing off. I saw this with bloggin-ads and winningtheweb. They ran some pretty hefty contests. I’m not sure if they’ll ever make the kind of money they already spent. Bloggin-ads had a Macbook air contest. From what i heard, the winner never received the prize. (If i am wrong, someone please let me know and i’ll update this post.) Now bloggin-ads is trying to sell for $7000 at sitepoint. The high bid right now is $3500. You see what i’m getting ad. If you minus the macbook air and all the other ebooks, themes, and junk that was used to promote that site, that blog was a money losing venture. It doesn’t help when a “make money online” blog ends up losing money. “Lose money online” doesn’t have a nice ring to it. I don’t think people are entering that phrase into search engines either. And winningtheweb, does that blog make any money?

Rant done. I think these blogs are perfect examples of the chow effect. Newbie bloggers enter this niche and think that they can spend a few bucks and turn their site into monsters. It doesn’t work out that way. Any idiot can spend money and start up a new business. But a true businessman can create profit out of nothing. Of course, having deep pockets help, but it could also prove to be your Achilles heel. If you rely on it too much, eventually you will run out of money to throw away. Think about that the next time you want to spend over your limit on your blog promotion.

Recently, my mom has been lending out money to one of her close friends. This lady’s husband died in a shooting at his business. He had life insurance so his wife ended up with around 3 million dollars. It was tragic and all of a sudden, but at least she was taken care of financially. She started up several businesses with her new found cash. She over spent her budget and all of them eventually failed. Someone that drove a Benz 500 and lived in a 6 bedroom house in Southern California, now lives in a one room studio apartment. She is selling her Cartier and Rolex watches to friends for rock bottom prices just to survive. It’s a sad story, but things like this happen when you don’t know how to manage your money.

11 thoughts on “Spending too much can ruin your chances of making money online

  1. m.dinesh

    Contests are great thing for a blog. Its like advertising your blog. But the biggest task for a blog admin, is to bring back the visitors after the contest is over.
    And the best way is to make them subscribe.

  2. Jared Stenzel

    You can make money online without contests, without purchasing a customized theme, and without paying for advertising. These are just the luxuries of those willing to pay to jumpstart their blogs. Spending money doesn’t really help your blog all that much in the long run.

    A month after a contest where you gave away $100 worth of prizes you will see few if any really beneficial perks to running that contest. Spending too much can definitely ruin your chances as the more you spend, the more you have to earn back. Good post noob.

  3. m.dinesh

    @Jared: That is why i said, rss subscription via email is really necessary to gain our visitors back.

    If they open up the mail, and if they find interesting topics, they may become regular readers.

  4. ChiQ Montes

    I have a feeling blogging-ads owners wanted to sell their blog already months ago that is why they had a “big contest” giving away mac book air to show impressive stats and inflate rss subscribers.. thinking, if we could sell the blog by this much then what we have spent on our prizes will return to our pockets.. but that is just my opinion.

  5. Beau71

    Great post. I have been thinking of running a promotion on my site soon; however, I want to be careful not to fall into this category.

  6. m.dinesh

    I think we cannot predict that @chiq because he has been saying that he is really in troubles. If its right, he can easily earn huge money through his blog by writing reviews and through affiliate marketing too.

  7. the noob Post author

    m dinesh- its good to give out free stuff within your limit. no need to blog past your means.

    jared- yeah, free is the best way to go when ur starting out. everything else is just showing off.

    chiq- yeah that blog smells fishy

    beau- u should still go with the promotion. you don’t have to give away anything huge tho. it’s not worth it. grow your blog and ad networks will sponsor the prizes for you. 😉

    m dinesh- i don’t want to hear about people troubles. especially from MMO types. you can’t be a salesmen and use the “im have money trouble so please by my product” pitch. very depressing and not very comfortable for the buyer.

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  9. marketing guy

    Excellent post. I know a few people who went nuts when they first started out and overspent on everything.

    They bought ebooks, subscriptions, the latest marketing software, custom wordpress themes, you name it.

    The beauty of this business is that you dont really need to spend money to make money. I understand that buying a piece of needed software here and there can be a great help, as can some highly targeted PPC ads, but all of my blogs make some sort of money and I have never spent a dime on any of them. The only thing I put into them is large amounts of my time.

  10. the noob Post author

    marketing guy- thanks. yeah it’s not good to go nuts buying stuff that are “make money online” or “internet marketing” related. Rip off 99% of the time. Exactly, free works for me. I think later down the line, people spend money because it cuts down on the time. but this doesn’t become an issue until you start making money first. Thanks for commenting!

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