Content Over eCommerce

The average Joe on the street is very familiar with the eCommerce business model. It’s the easiest to understand – you make money by selling something. The content model is a little harder to explain but once told, most people understand it. Content based sites make money by advertising or affiliate programs. The advertising can range from in-house sales to using a 3rd party advertising network like Google AdSense. With the explosion of AdSense, content based sites have grown like mad. It seems everyone wants a piece of the “easy money” that can be made.

Having dealt with both models I can tell you that the content model is way better than the eCommerce models. Here’s why.

Less Start Up Cost

An eCommerce site requires a lot more start-up capital than a content site. The costs are many. You tie up money in inventory. My brother runs an eCommerce site and he has over $10,000 sitting in inventory. He also needs space to hold all this inventory. The cost of running the site is also more expensive. eCommerce sites require SSL and their own IP for hosting. There are also credit card charges, shipping & handling, and the lists goes on.

By comparison, you can start up a content site tonight and have up on the net by tomorrow and it wouldn’t cost you dime because you can use free hosting services like Blogger. Your running cost would be zero so anything you make is profit. My flagship site, TheTechZone, was started with zero investment.

Content sites are easier to get ranked on Google and it won’t cost anything. eCommerce sites have a very hard time getting ranked and in most cases you will have to pay and use Google AdWords in order to appear on the search engine.

You Can Run A Content Site Anywhere In The World

This to me is the number one advantage a content site has over eCommerce. I am not bounded any one location when it comes to running my sites. As long as I have internet access, I can make money. During my recent trip to Taipei, China and Hong Kong, I was able to update The TechZone with nearly a dozen articles.

If you run an eCommerce site and you take a vacation what happens to the site? Unless you have someone to run it for you, the online store is pretty much closed till you get home. That’s what happened to Lemmy with his eBay store. He took a vacation; store shut down and made no income while he’s away. Content sites don’t suffer this fate – they truly do run 24/7.

eCommerce sites are bounded by their location. You can not move it as easily as you can a content site. When I was running the Cable Store with Carl Nelson, we had local suppliers for our products and if we were to move to a new city, our entire cost structure would change. We would have to carry inventory because the suppliers would no longer be a quick drive away.

When he was in Hong Kong, Carl ran HK Toyz. When he came back to Vancouver, HK Toyz pretty much died. Now that he is back in Hong Kong, he has started up HK Toyz again. Yet throughout this, his content site, HardCoreWare.net kept running no matter where he was in the world.

Content Is Less Work

People by nature are lazy. They want to do the least amount of work for the highest amount of reward. An eCommerce site entails more work. You have customer service headaches, RMA, credit card fraud, shipping mistakes, inventory problems, etc.

For me, producing content is a lot easier and less painful way to do business on the net. I can do it from anywhere. Even while laying on a beach in Mexico (I’ve done that before). Another thing to keep in mind is; it doesn’t have to be you creating the content. Sites like Digg, YouTude, MySpace and Plenty Of Fish were all built on user created content.

User creates the content, you rake in the cash. Now THAT is the ultimate business model!


15 thoughts on “Content Over eCommerce”

  1. Knuckles10 says:

    “The content model is a little harder to explain but once told, most people understand it.”

    When I tell others about my content sites I say it is similar to a free newspaper. You develop content so that people will read your ‘newspaper’ and you can sell advertising on it to earn money.

  2. Sharon says:

    Lem and I run a couple of e-commerce site and John just recently got me to test content sites. We just got our first check from commission junction and Lem is in heaven. Not to mention, Google has been very kind to rank us high on search….

  3. Sharon says:

    Of course, Lem would never give up his crazy mask so that we can sit at some beach and sip margaritas all day.

  4. Josh says:

    Hey John one thing I find hard is that I can never find a content managament system that I can use to update my site easily. Would you happen to know of any good ones? what do you use to manage your websites?

  5. John Chow says:

    The TechZone is powered by a custom CMS. The other sites are power by http://www.joomla.org

    This blog is pwered by http://wordpress.org

  6. Juan says:

    I started with zero cash and free CMS. In fact we still use PostNuke, pretty much tweaked but PN anyways. We are now moving to Joomla, just because PN is such a PITA with our server load . ¿Do you think I got rich paying custom CMS?
    I´ve had e-Commerce in the past and is not as good as you might think, you recieve money, but voila! it´s not yours, it´s bank money, suppliers money, tax money, everyone´s money except yours. Being Online Media will get you free: food, travelling, pens, t-shirts, cash and more. Today I woke up at 11 AM, had lunch at the Ritz Carlton on Intel´s wallet, sold out ads in my site till 01/01/07, got a new VGA for my HTPC (free) and bought tickets for Vegas CES where I wil get more free everything 😀

  7. Carl says:

    I started an ecommerce site a couple weeks ago, and it’s doing very well for me. And I disagree that it’s more work – if you actually do testing, etc, to base your content on, writing content requires a LOT of work. Unless you’re talking about going on sites that offer “free content” and using press releases as content, or old blogs as content…

    Anyway, each has its pros and cons. There are plenty of people who make hundreds of thousands to millions on ecommerce and even just ebay. Same goes for content.

    But to say creating content takes no work… well to most people it does… At least to make content people actually want to read.

  8. Carl says:

    Oh yeah my eccomerce site cost nothing to start either – free CMS, free shopping cart, and I only buy products from the wholesaler after they’ve been sold. I am starting to carry some stock to be able to ship orders faster, but that’s not totally necessary (and most orders are spoken for)

    I agree about the ‘live anywhere in the world’ part though, that’s for sure!

    The idea, as always, is to build it then sell it though! 😉

  9. John Chow says:

    Like I said at the end of my post. It doesn’t have to be your content. Some of the biggest sites in the world were done with user created content.

    Let’s face it, by yourself you can only create so much content. However a social networking site like MySpace or Digg, well they have content flying out left and right.

  10. Carl says:

    Yes, it’s one thing to offer user-created content to readers. It’s another to use user-created content and pass it off as original…

  11. Yeah, content sites are great. But “digital eCommerce” sites are also great – that is, if you’re selling digital products like eBooks or software. No inventory and you can run those sites from anywhere in the world 😉

  12. I feel like I am rummaging around in your agrden by being on old posts… but they are as enetratining and informatiove as the new ones…

    Online Marketing’s last blog post: The FaceBook Username Rush

  13. I feel like I am rummaging around in your garden by being on old posts… but they are as entertaining and informatiove as the new ones…

    Online Marketing’s last blog post: The FaceBook Username Rush

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