Welcome to the fourth update of the Authority Internet Business Traffic and Income Report.
This case study was started over year and a half ago, with a goal to show how to build an authority business for a brand new site called DevelopGoodHabits.com (or DGH for short).
In each post, I detail the techniques I use to create reliable, long-term Internet income from a single brand.
At first, I thought the site would make money from a variety of sources, but so far I’ve stuck with Kindle publishing because it’s working really well.
To illustrate what’s possible, I provide a quarterly breakdown of the traffic and income that the business has generated.
If you haven’t read the last three updates, here they are:
- Authority Traffic and Income Report #1 [Apr. through Sep. 2013]
- Authority Traffic and Income Report #2 [Oct. through Dec. 2013]
- Authority Traffic and Income Report #3 [Jan. through Mar. 2014]
Like you, I’m a big fan of the sites that detail the results of their business—warts and all. It’s my hope that you’ll take the lessons from each of these updates to grow your business and learn where to best focus your attention.
Just like in the last couple of updates, there have been a number of breakthroughs (and setbacks) in the last quarter. The income has skyrocketed, yet I made some mistakes that helped me learn a few valuable lessons about what it takes to build a lasting brand. So let’s start by talking about them…
4 Important Lessons During the Last Quarter
Sidebar: In the past three updates, I broke down the lessons into two sections: successes and failures. Now I’m switching things up where I talk about both in the same section.
Honestly, I think it’s better to focus on what was learned instead of being fixated on the highs and lows of a business. This is especially true for those painful mistakes that initially seem bad, but have provided the best lessons. As Syrio Forel once said, “every hurt is a lesson, and every lesson makes you better.”
With that in mind, here’s what happened with the DGH brand in the last quarter and more importantly, the lessons that can be applied to your business.
#1: Experienced a Dramatic Increase in Income
The income for the quarter didn’t start out well, but it quickly rebounded and then suddenly it skyrocketed. Basically it went from $14K (April) up to $61K (May) and then down to $50K (June). How did this happen? I feel it was due to a few factors.
To start, my last two books (Habit Stacking & To-Do List Makeover) sold really well. I think this is the result of practicing the “core fundamentals” over the last 18 months. Yes, a huge bulk of the income comes from only a couple of books, but they wouldn’t have been successful if I didn’t do a few key things when I began the case study (more on this shortly).
On a personal note, I achieved two “business bucket list” goals: (1.) Have a book break the top 100 overall chart on Amazon (it peaked at #73) (2.) Rank overall #1 as an author in the Business & Money Category. Sure, these are vanity metrics, but it’s still nice to see my face next to a number of high-profile authors that I really respect.
Another reason for the income increase? During the same timeframe, there was a 50 percent bump in sales on all my other books. As an example, during the three week span before the launch of Habit Stacking, I averaged 98 daily U.S. sales on the eight previously published books. Then three weeks after the launch, I averaged 153 daily U.S. sales on these same eight books. Really, the only “marketing” I did was to add another title into my catalog.
Now as I alluded to before, the sales increase was largely due to practicing the fundamentals that I’ve emphasized throughout this case study:
- Build an email list: Having a list full of proven buyers is unbelievably important. In fact, in a recent post I analyzed my promotional links and realized that most of those key initial sales came from the email list.
I’ve said this a bunch of times, but I’ll say it again. Besides writing, the best use of your time is to focus on building an email list. Seriously, if you’re not doing this activity, then you probably won’t see a lot of long-term success with Kindle publishing.
- Craft good hooks: Kindle book titles shouldn’t be a collection of keywords. They should have a compelling title that promises a solution to a very specific problem that potential reader’s experience.
- Write great books: I’ll be the first to admit that some people hate my books. That’s to be expected. But, I always set out to write the best possible book on that particular topic. This means: providing lots of information, giving actionable strategies and hiring two editors to go over the content. The more you can do to provide a great reading experience, the more long-term success you’ll experience.
- Get a quality book cover: People judge books by their cover, so trying to save a few bucks on the design (like hiring someone from Fiverr) is one of the worst business decisions you could make.
Think of your cover design as an investment. Pay a little more upfront and you’ll earn it back from the increased number of people who buy the book—simply because the design catches their eye.
- Publish consistently: Habit Stacking was my 40th book as a Kindle publisher. In other words, I had to write 39 previous books to finally hit a home run that exploded my sales numbers. The lesson here is consistency. Some books will bomb, others will take off. Do your best to provide a great reading experience, but once a book has completed, get started on the next one.
Now, “publish consistently” doesn’t mean churning out garbage and simply getting stuff into the marketplace as fast possible. I know this is an ironic statement coming from a guy who once wrote “How to Write an eBook in 21 Days.” My viewpoint has changed dramatically in the past year and I now understand the important of creating the best possible reading experience.
This leads to the second lesson…
#2: Received Negative Feedback on Habit Stacking
Like I said in the intro, highs and lows this month. While Habit Stacking took off in sales, it has also been shredded in the reviews. While you could make the argument that “haters are gonna hate,” I feel it’s important to be a realist. Why was the book slammed? Because it wasn’t my best effort. Honestly, sometimes in life you have to admit these things to yourself.
Overall, I feel the habit stacking daily practice still has merit. It’s something I do every day to complete a number tiny habits. But, the explanation of the idea could have been better.
Fortunately, the best part about Kindle publishing is you can always edit and update a book. So down the road, I’ll overhaul this book and create a more in-depth, second edition.
The lesson here is I (sorta) broke one of my “fundamentals” – write great books.
If you’re not growing, you’re dying. Reading those negative reviews was a painful lesson, but they also opened my eyes and made me realize the importance of providing better content. From this experience, I’ve decided to re-focus my energy on writing the best possible books.
This means doing a number of things:
- Spending more time in the outline phase to make sure the content is something readers will find valuable.
- Polling email subscribers to identify what obstacles they commonly experience.
- Slowing down my production schedule to around six weeks per book.
- Writing longer books, around 20,000 to 25,000 words apiece
- Getting feedback from beta-readers and making adjustments along the way.
The self-publishing space is getting more competitive. Readers are starting to expect quality books in the two to three dollar price range. So if you’re not upping your game, then a year from now you’ll be left behind wondering what happened to your once lucrative book business.
Stop wondering what will happen in the future for self-publishers. Instead, focus on how you can provide more value to individual readers.
#3: Had Problems with ACX.com
Ever make a mistake that cost you a few thousand dollars?
I have and it really sucks.
Without going too much into the gory details, I made a small mistake when submitting the audio version of Habit Stacking to ACX.com. Even though I noticed my blunder a few hours after the fact, it took six weeks for the audiobook to be published. Let me say that again—six weeks. When I compare audio sales versus Kindle sales, I’m sure this was at least a three thousand dollar mistake.
Okay, I know a reader or two might sarcastically think “Waaaah, Steve didn’t make more money this month. I feel soooo bad for him.”
The reason I’m discussing it here is because of two points:
First, it was incredibly stupid of me to not double-check the submission. It would have taken five minutes to do, but I made the mistake of assuming everything was fine.
Next, I’m annoyed at ACX. My experience with their customer service was a joke. I’d email them and they’d respond back saying the problem would be fixed in 7 to 10 business days. Then I’d follow up two weeks later and they’d send the same damn email—the problem will be fixed in another 7 to 10 business days.
Yes, I screwed up a small detail, but ACX’s lackadaisical attitude to correct it cost their company a few thousand dollars. Sorry ACX, it’s time to get your act together. Perhaps you should invest that extra 10 percent you’ve taken away from the content creators and use it to build a better support system.
All complaining aside, the big lesson here is to double-check your work. This goes for all book platforms: ACX, KDP and CreateSpace. We all make dumb mistakes. So take that extra time to make sure you’re ticking the “right boxes” before submitting a piece of content.
#4: Start Thinking Co-Operation Instead of Competition
The bulk of my income comes from Kindle publishing, so I know how easy it is to get into the “competition mindset.” You see a book is doing well, often surpassing yours on the charts, so you start to panic. When this happens, you might get jealous or even secretly hope that readers will leave a bunch of negative reviews. Perhaps you even leave one yourself. (Seriously, I feel there should be a special place in hell for Amazon authors who leave negative reviews on their competitor’s books.)
My point is this. One of the worst mistakes you can make is to view other authors as your competition. Instead, start looking for ways where you can help one another out.
As I mentioned before, it’s only going to get tougher to compete in Amazon’s marketplace. In addition to building your own brand, you should also look into forming strategic alliances with authors who share a similar audience.
This is a valuable lesson I learned in the last quarter. Instead of looking at other authors as my competition, I started to reach out and make individual connections. We’ve shared strategies, talked on Skype, given feedback and even promoted each other’s books.
My advice to you is to start making connections with the other authors that share a similar audience. Reach out to them with a simple, complimentary email. Figure out how you can support their work. Think of how you can best create a strategic alliance with the people who cover a similar topic. Do all these things and you’ll discover it’s not hard to get assistance on your latest books.
Alright, those are four takeaways I learned from the last quarter, so now let’s go over the specific numbers.
Traffic Results of Develop Good Habits
Keeping with the trend from the previous quarter, my efforts on the blogging front for Develop Good Habits has been pretty poor. Since I’ve primarily focused on publishing Kindle books, I didn’t have a lot of time to publish more than one or two articles per month.
That said, I did focus on two strategies to generate more traffic:
- Hired Steve Roy from Ending the Grind to write and submit guest posts to other personal development blogs
- Increased the quantity of SlideShare presentations.
While these two tactics increased the number of email subscribers (more on this later), they also lead to a sizeable increase in Web traffic.
Here are the stats with how they compare to the totals from the last T&I Report:
- 50,026 unique visitors compared 28,725 visitors (an increase of 21,301 visitors)
- 02:06 average visitor duration (a decrease of 0:08)
- 70.40 percent bounce rate, down from a 70.62 percent bounce rate.
When looking at these numbers, you’ll see that the average traffic has almost doubled. Not bad for a site that I basically ignored. Hopefully in the fall, I will have more time to sit down and create a better content generation strategy.
Now, let’s break down the traffic into specific sources (some of the following are repeat visitors, so that’s why the total is more than the 50,026 unique visitors):
- 46,216 Direct (including Kindle book readers and most email subscribers)
- 11,397 Search Engine
- 5,274 Reddit
- 2,494 StumbleUpon
- 2,102 Amazon (browsers, not book buyers)
- 1,148 Pinterest
- 1,048 SlideShare (people who don’t go directly to my squeeze page)
- 966 Facebook
The number that jumps out is the 11,397 from search engine traffic. This is almost triple from the previous T&I report. From the start, my “strategy” was to ignore the search engines and instead focus on providing good content with the hope that I’ll eventually get some Google Love. And this strategy is finally starting to pay off.
Now, a metric that’s more important (in my opinion) is the number of email subscribers. As I mentioned in the post about monetization, the Most Wanted Response (MWR) for DGH is to build an email list.
How many subscribers did I generate in this three-month span?
Here they are (broken down by their subscription path):
- Kindle books: 5,934 subscribers
- SlideShare: 1,483 subscribers
- Search Engines: 624 subscribers
- Amazon.com (author page): 206 subscribers
- Guest Posts: 127 subscribers
- Mobile apps: 124 subscribers
- Guest posts: 98 subscribers
- Other: 240 subscribers
- Total for 2nd Quarter 2014: 8,836 subscribers
- Previous total: 5,785 subscribers
- Grand total (up to July 1st): 14,621 subscribers
As you can see, the Kindle books are still the #1 source of email subscribers. What excites me about this stat is these are paying readers who join my list. That means that as the list grows, I’ll have more and more subscribers who are also customers. So (in theory) each successive book launch will have a larger pool of potential buyers.
Another thing that I’m happy to see is the list is growing from other traffic sources like SlideShare and organic search engine traffic. This is an important stat because you never know if/when Amazon might change their policy about collecting email addresses. By focusing on alternative methods for list building, I hope to “future proof” my business in case Amazon makes a random change down the road.
Income Results of Develop Good Habits
As always, income is where the rubber meets the road. While it’s nice to talk about lessons, traffic and conversion, most people want to know one thing—how much money have you made?
My income comes from six places:
- Habit Kindle Books: 70 Healthy Habits, Wake Up Successful, Writing Habit Mastery, 10,000 Steps Blueprint, 23 Anti-Procrastination Habits, Resolutions That Stick!, Declutter Your Inbox, S.M.A.R.T. Goals Made Simple, Habit Stacking, To-Do List Makeover and Master Evernote.
- Amazon Associates (physical product and book recommendations on DGH)
- RevMob (an advertisement platform for the app Trigger Monitor)
- Audible.com (Audio book versions of my books published through the ACX.com program)
- CreateSpace.com (Print book versions of my Kindle books).
- BuckBooks (My friend Matt has started a “group book event” service where he pays a small commission for each email subscriber that joins his list)
In the last report, I mentioned that the business generated total revenue of $49,911.59 in the preceding three months. So here’s what happened in the second quarter of 2014:
- Amazon Kindle: $11,480.35
- Amazon Associates: $315.71
- RevMob $3.00
- Audible: $1728.81
- CreateSpace: $258.70
- BuckBooks: $0
- SUBTOTAL: $13,786.56
- Amazon Kindle: $56,639.35
- Amazon Associates: $1,684.41
- RevMob $2.89
- Audible: $1,865.36
- CreateSpace: $1531.77
- BuckBooks: $27.00
- SUBTOTAL: $61,750.78
- Amazon Kindle: $44,848.69
- Amazon Associates: $766.08
- RevMob $3.13
- Audible: $2,500.00 (estimated)
- CreateSpace: $2,202.13
- BuckBooks: $0.00
- SUBTOTAL: $50,320.13
Income 2nd Quarter 2014 (April through June): $125,857.37
Previous Grand Total: $75,758.40
GRAND TOTAL (for everything that DGH has earned so far): $201,615.77
Obviously, the financial numbers for May and June are significant. To be honest, it’s more than I ever thought was possible through Kindle publishing.
However, the mistake is to see the jump from April to May as some sort of “overnight success.” While it’s mostly due to a handful of books, the strategy behind this breakthrough has remained the same as it was on day #1—practice the fundamentals every day and you will achieve a breakthrough in your book business.
Another happy result is I’m starting to see income diversity from CreateSpace, Audible and Amazon Associates. Sure, I still depend way too much on the good graces of Amazon, but at least all my income doesn’t come solely from the Kindle platform. And hopefully this trend will continue as I explore other opportunities in the third and fourth quarters.
Total Expenditures of DGH
Every online business requires a financial investment. The trick is to know what’s worth buying and what can be skipped, so another point of this case study is to provide a financial breakdown of what I spend on DGH.
There are five categories of expenditures for Develop Good Habits:
- Content: Blog posts, guest posts, editing, Web articles, lead magnet creation, autoresponders, and a few e-book sections
- Graphics: Stock photography, logo design and e-book covers
- Audio and Print: Turning Kindle books into different formats. (here’s the service I use):
- Marketing and Development: Press releases, Web design tweaks, Fiverr gigs, paid advertising, hosting, domain registration and various experiments
- Virtual Assistant: A 75 percent rate of what I pay my VA to work on DGH-related projects. (The other 25 percent of her time is spent on other activities).
Here is the financial breakdown during the three-month span:
- Content: $2,984.20
- Graphics: $262.87
- Audio and Print Versions: $1,185.00
- Marketing and Development: $905.13
- Virtual Assistant: $3,341.00
Expenditures 2nd Quarter 2014 (April 1st through June 30th): $8,678.20
Previous Grand Total of Expenditures: $15,470.82
GRAND TOTAL OF EXPENDITURES: $24,149.02
Now, compare my expenditures to my overall gross income and you’ll get the net income for the Develop Good Habits brand:
Gross Income: $201,615.77 – Total Expenditures: $24,149.02 =
Net Income: +$177,466.75
The numbers so far have surpassed my wildest expectations. I feel it clearly shows that you can succeed with a small publishing business. The trick now, is to look for ways to sustain, even grow this income.
That’s why I like to closely examine the business every quarter and look for ways to improve on what’s working.
Here’s what I’d like to do for the 3rd quarter of 2014…
Future Strategies of Develop Good Habits
I’m doing a lot of traveling in this quarter (three weeks in the Pacific Northwest, one month in Italy and two weeks in Cape Cod). So I probably won’t do much in the way of growing the business. That said, I’d like to explore three opportunities.
#1: “Work On” Two More Books
As always, my top strategy is to continue publishing more Kindle books. (If it ain’t broke, don’t fix it.) The challenge is to do it without taking up too much of my vacation time.
So for this quarter, I’m working on two books.
The first book involves a lot of research that my VA will mostly handle. All I have to do is make sure the content flows and provide a helpful solution. This is the perfect type of book that can be managed during my pockets of downtime.
The plan for the second book is the exact opposite. I’d like to put together a longer (25,000+ words) book that offers a detailed solution to a specific habit-related problem. The idea here is to use what I’ve learned from the negative reviews of Habit Stacking and create a book that will stand the test of time. Potentially, I’d like to explore the idea of trying to have this book hit the New York Time’s Best Seller List (Habit Stacking actually outsold many that are on this list for a month or so.)
Honestly, I don’t expect to complete this second book before October. So my income will probably go down since I won’t publish anything new for a few months. However, I feel this is the right move because I could potentially have a book that will do important things for the DGH brand. So basically it’s one step back, to take two steps forward.
#2: Promote Affiliate Offers
Way back when I started this case study, I imagined promoting a variety of affiliate marketing offers. The problem? Most of the products in the personal development space don’t gibe with the core message of the DGH brand. Instead of emphasizing daily habits, they focus on pseudo-science theories like the Law of Attraction. So up till this point, I haven’t promoted a single information product.
Fortunately, in the third quarter, there will be one, maybe two, habit-related products that I’m more than happy to promote.
For a long time, I was discouraged that I couldn’t find a quality offer to promote. Now I’m glad this happened because my recommendation will be more genuine. Since I’m not someone who constantly pitches products, subscribers will know that any recommendation has their best interests at heart.
#3. Translate Books into Different Languages
The foreign language market can be a huge growth opportunity for any Kindle publisher. While your books are sold in a variety of countries (like Germany, Brazil, Spain and France), most people prefer to read in their native tongue.
Unfortunately, the “foreign language translation” market is still in its infancy. There really isn’t a simple strategy where you can get a book translated and have it marketed to country-specific readers. Instead, you have to test a variety of strategies and see what works best for you.
For instance, I’m currently testing three things:
- BabelCube.com which provides a matching service between authors and translators. Native speakers will translate your book for free, and BabelCube will market the book through a number of online retailers. In exchange, you give exclusive rights for that book in that language and a percentage of the earnings. (In theory, this is a great idea, but I’m still not convinced that this site is the perfect solution.)
- Paying a translator directly and self-publishing the finished product. This gives you 100% creative control, but trying to promote multiple books in multiple languages can become a very time-consuming task. So for now, I’m testing one of the largest non-English eBook markets (German) and seeing how this works.
- Working directly with foreign publishing companies and negotiating a deal for a direct translation. This works similarly to a traditionally published deal—you get an advance and a contract for a percentage of the net earnings. Up to this point, I’ve negotiated contracts that range from $900 to $4000 for a single book in a single language, but this process involves a LOT of paperwork, so I haven’t seen a dime as of yet.
Each of these strategies has its own positives and negatives. Honestly, I’m still learning as I go along, so for now, I don’t have any solid “how-to” advice about how to translate your books into different languages.
My hunch is in the next year, we’ll see one company recognize the opportunity here and start to dominate the marketplace. Perhaps it’ll be BabelCube or even Amazon. Until then, my best piece of advice is to test things on your own and see what happens.
The Reality of “Kindle Gold Rush” Mindset
I’d like to close out the fourth installment of the Authority Business Traffic and Income report with a quick story.
As I mentioned before, I’m spending the summer traveling to a variety of places. A few days back I was in Seattle and visited the Klondike Gold Rush museum.
One of the exhibits that stuck out was a wheel that you could spin (kind of like on Wheel of Fortune), which demonstrated the likelihood that you would “strike it rich” during the Gold Rush. Most of the wheel was dominated by a result where you would fail or make barely enough money to support yourself. Only a small sliver of the wheel said you’d strike it rich—like 0.01%. In reality, the people who truly benefited from the Klondike Gold Rush were the people who outfitted and sold goods to the potential miners (i.e. “the shovel sellers.”)
Now, I’ve heard a lot of marketers compare Kindle publishing to a modern day Gold Rush. For a long time, I thought this comparison was complete nonsense. But now I see that it’s kind of true. Just like in 1897, there’s a lot of money to be made. The problem? It’s the “shovel sellers” who rake in the bulk of the cash—not the individual authors.
You might be wondering why I say this after talking about making good money on Amazon’s platform. My reason? Well, I’m starting to be recognized as an authority on Kindle publishing. As such, I feel it’s my responsibility to provide factual information on what actually works. Instead of trying to sell you on the dream that there is a river full of gold, I think it’s more helpful to describe the strategies that I know are useful.
These people (or parasites in my opinion) who sell you on the idea that Kindle riches can be found from a push-button piece of software don’t really care if you make money or not. They’d like you to think there are hidden pieces of knowledge that only a handful of authors know about. Or that you can be lazy and still be successful.
The truth is there are no secrets. Really, success with Kindle publishing comes down to practicing the fundamentals that I mentioned before (build an email list, write great books, have a quality hook, include an eye-catching cover and publish consistently.)
Remember this lesson the next time you read an email that hocks the latest “secret” to success on Amazon. In fact, ask the product creator to show an example of multiple books they’ve published with an up-to-date screenshot from their sales dashboard (this only takes one minute to do.) If they can’t provide legitimate proof that they are walking the walk and actually making money, then they’re nothing more than shovel sellers who are trying to sell you on a “river full of gold” pipe dream.
Okay, this post turned into a bit of a rant.
My hope is that you’ve learned that Kindle publishing can be a successful business model, but it requires hard work like everything else in life. You need to work at it on a daily basis and learn from each obstacle that comes along the way.
As always, the secret ingredient to this case study is your comments and questions. So I’d love to get your feedback.
Questions? Comments? Concerns?
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