$100.00 Sale Amount -$ 50.00 Cost of Goods -$ 5.00 Transaction Cost (bank charges, credit card) -$ 8.50 Shipping Fees (This assumes you're delivering a product, it needs a box, label, and has a delivery cost. -$ 10.00 Customer support costs - time on phone, email, etc... supporting and processing transaction. What's 1 hour of your time worth? $ 26.50 = Margin Assuming this margin is correct for your website, is a Pay per Click campaign right for you? You'll need to look at your stats to judge this properly. You need to determine how many of your visitors are converting into buyers. IF your website has a 4% conversion rate, and your category is moderately competitive, you will probably need to budget at least $1.00 per click to get spot #3. Spot #3 is important because more often than not it's top 3 spots per page of search engine results that are reserved for Pay per Click advertisers.

Assuming your website gets into top three spots, here's how math works if you get 100 clicks in a month. Since it's all percentage based, same holds true if you get 25 clicks or 10,000 clicks.

100 clicks @ $1.00 per click = $100.00 cost 4% conversion = 4 sales = 4x $26.50 (margin on sale) = $106.00 Profit = $ 6.00

So, if above were true, and IF pay per click advertisement sent you 100 visitors per month, you would make only $6.00. Would you make much less having spot #4 instead of spot #3 ? If it meant one less sale a month, that would be worth it. You would make $70.00 more by selling less! Does spot #3 get much more traffic than relevant results in spots 4 through 10? Not at all for spot # 4, 5, 6, and only a little bit more for spot #'s 7-10. Remember, people usually look at title or site description to see if it is relevant. Pay per Click is worth money if your website is not found under any relevant queries in top 20, but its value drops quickly if a website is found easily in free listings within search engines.

Is Pay for Inclusion Less Expensive? If we use same calculation as above, and your website had 4 sales from a pay for inclusion engine where you paid $39.00 per year, or $3.25 / month, your profit would have been $103.25.

What About The Cost Of Search Engine Optimization? Search engine optimization does not have to be expensive. You can do work yourself, but you need to ensure that it makes sense to do so. By this I mean, is doing it yourself a cost efficient, business proposition? Any time that you as an individual put into search engine optimization is time that you take away from business fundamentals and essentials. It's time away from customer support, content creation, service, administration, product research, other marketing, etc... What is that time worth? It's got to be part of ROI calculation too. More and more people are choosing to outsource this work. It's estimated that 70% of online businesses will outsource non-core operations this year. It only makes sense. It's smart business to focus on what you know and do well and to hire others to support you in other areas. Not many smart businessmen write their own contracts - they get their lawyer to do it. They want to ensure it's done right. Doing it right in first place saves money in long run. Outsourcing means getting someone else to do work for you, properly. It does not mean getting someone to tell you what to do, or how to do things.

What's Right For Your Website? In long run, a website operator that has a well optimized website will beat out a non-optimized website that concentrates on Pay per Click advertising for customer acquisition every day of year. He may make fewer sales in a year, but he will make more profit from each sale. If website is properly optimized, it will enjoy better placement in more search engines. This means it will survive, and prosper in long run.

If you have an informative web site, search engines want to send you lots of customers. That's because more web surfers find what they want, more they'll use a particular search engine and recommend it to their friends. The search engine also benefits, as it becomes known as a resource that gets its clients - searchers - to their destinations quickly and efficiently. The more people recognize how well engine works as a resource, more it gets recommended, and used. As popularity increases, so do engine's revenues from advertising.

What Does Your Web Site Need To Receive Traffic From The Search Engines? Small web sites with only 1 or 2 pages set themselves up for failure, simply because they usually don't have enough content of interest. There are of course exceptions, where 1 or 2 pages are each as long as a book. But these are awfully frustrating to read, and no one will be satisfied with them. Most often 1 or 2 page sites are simply too short to provide any useful information, so search engines don't take them seriously. Among other factors, search engines examine how deep a site is. The more meaningful content present, more weighty site is viewed as, and more importance it is given.

If you are wondering about whether to bother, ask yourself this: Why does your company have a web site? What does company do with it? Think about it. Most companies today have web sites, and most market web sites to facilitate customer acquisition, to increase their customer base, and to improve customer retention rates.

There are a number of reasons for having web sites. Many companies use theirs to enhance their customer service. Using a web site as a marketing vehicle is a great way for a company "to put word out" about products, services, or offerings.

Most importantly, remember that your web site is an online resource that your clients can use to find answers to frequently asked questions, "how to" tips, and to educate themselves. When including content on a web site, always remember that knowledge shared may be common to you, but it's likely that you are an expert in eyes of your clients. People visit your web site for your product or service, but also for information. If they find useful, relevant, information, they will keep coming back, and will likely make purchases. People like to buy from experts.

Instead of thinking of your web site as nothing more than an online billboard or business card, think of it as an online menu, that lets people get an idea of what it is you do, and how you do it. Develop a content rich website, optimize it, and let search engines increase your website traffic, naturally. If you optimize each major web page within your site, you will increase rankings in search engine results and therefore receive targeted traffic for each of those pages.

Doing each of above - ensuring relevant content is present, and optimizing pages - will ensure that search engines have what they need so they can do their work. It will also ensure that they can send you targeted traffic (customers), so that you can get that 83% of first time visitors your online business needs to survive.