My biggest problem with the Rent a Site Model

2 replies
Hey Everyone,

Just thought I'd share this with everyone and maybe get some insight.

I've dedicated my latest IM efforts in the Rent-a-Site Model and have had some pretty descent success in terms of actual rentals.

Almost all the business I approach (mainly through e-mail) show interest in renting the sites I own which is great. My biggest issue to this date is pricing.

Although I do testing and make sure I'm getting traffic to my sites and I also make sure that I'm getting inquires, I have a difficult time predicting how much I should charge to rent a site a business owner.

There are two main factors for this:

1. I don't know how many potential customers will actually convert and have to rely on speculation and the honesty of the business owner.

2. Most business owners are savvy negotiators and I fear if I price to high I will lose some. Because I try to focus on very targeted niches, I'm worried that if I get too greedy I will lose out on prospects and not be able to rent the sites at all.

Any ideas on how to conquer this?
#biggest #model #problem #rent #site
  • Profile picture of the author cma01
    I think you have to price the rental in context of what their service sells for, how many searches there are per month, and also what the other advertising options are in the area.

    How much would they pay monthly for a phone book ad?

    What does it cost to run an ad in the newspaper?

    What is the CPC for their industry locally?

    Are there local web sites that sell banner advertising? What would they pay per month to have a rotating banner on the site per month.

    What would a local TV or radio commercial cost?

    When you start looking at the pricing for standard advertising versus the exposure that a ranking web site will get them, it starts putting it in perspective.

    Do a little research on what your target businesses typically spend per month in advertising.
    "Wise men talk because they have something to say; fools, because they have to say something."
    ~ Plato
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  • Profile picture of the author cityofangels
    One important thing to know ahead of time is what the profit margins are for the business that you're targeting. If they have high profit margins (30%+), which are ideal clients anyway, then that's good to know.

    How many people go to the rented site? How many people who are interested in what they're offering do you think they could convert (be conservative)?

    Let's do the numbers. For example, let's say the average ticket price of what your client is selling is $100 and 50% of that is profit. You're sending targeted traffic to the rented site of over 300 people per month and he could convert 20%. That means, that he got 60 new paying customers in one month from your rental site--which means $6,000 in revenue to him ($3,000 in straight profit to him). It's fair to price your rented site for about 10%-15% of his increased revenue -- $600 per month. (minimum) That's more than reasonable--actually a bit on the low end, but I hope you get the idea. He paid you $600 to get him 60 new customers and he made $3,000 in profit!! Wow, now that's a great deal for that client!!

    In addition to know their profit margins, you should find out important things like CPC, cost of Full Page YP ad, etc. just to get a better idea of what he would have to spend. It's a lot more than 10%, that's for sure.

    Final note of caution: never price yourself too cheaply b/c the client will not take you seriously. They'll think you don't value what you do, so why should they. They will think you don't know what you're doing.

    Do a bit of research before approaching the clients and then you can price the site accordingly and you'll be happy b/c you're getting what you're worth and the client will be happy b/c he's making so much money from what you're offering that he'll gladly pay you whatever you want.

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