SEO Guys - What Profit Margin Do You Shoot For?

Berto

Berto

Movin to TX
Jan 3, 2009
3,138
155
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Proudly Incorporated in WY
wordai.com
The fun little discussion on taxes got me thinking - Am I profiting too much? What are you other SEO emperors going for?

Since I'm new to being fully self-employed, I've been taking my damned time on projects*, still do a lot of things myself, and afraid to pay for serious SEO services. I have some risk in my business so I do like stockpiling the cash.

Before calculating extra write-offs like rent and some travel and equipment expenses, my business in 2010 had a profit margin north of 70%. Would you say I am being too much of a cheapass?

I finally got my first BacklinksGenie account and 2nd DFB account, but I could probably use one more of each, on top of doing some real mininets like DeShea's and Dchuk/Grindstone's stuff, and buying quality PR links.

The expenses are basically my content writers, SEO software, hosting, domains, and SEO services ranging from DFB to SEScout to Pingdom. These are really all I need to run this thing at the end of the day. My main site got booted from AdWords and I said screw em, and never signed back up for MS Adcenter either. Don't know if I even want to with such good margins....

What do you go for? Should I stop being a pussy and start reinvesting more into this thing and start hiring and advertising more? Or do you play it safe like I do?

Thanks. Interested in opinions here.

* Just ask DrewClement... it's taking me FOREVER to get working with his offer... Drew I promise it'll happen soon when my tax nonsense is over!
 


Well 70% sounds like an OK number to me. But again some people are real aggressive and will run PPC and SEO stuff that barely breaks even and try to tweak it some.

On SEO I would take a look at what is making you money now. How difficult and what the competition is. Try to get an idea on why it worked.

Then expand that out horizontally into other niches and areas that look similar. Try to duplicate your winners and give yourself some insurance against losing a main site or having payment problems.
 
Drake said:
Well 70% sounds like an OK number to me. But again some people are real aggressive and will run PPC and SEO stuff that barely breaks even and try to tweak it some.

On SEO I would take a look at what is making you money now. How difficult and what the competition is. Try to get an idea on why it worked.

Then expand that out horizontally into other niches and areas that look similar. Try to duplicate your winners and give yourself some insurance against losing a main site or having payment problems.
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Thanks. That's basically what I'm doing, but I think too slowly.

eliquid said:
Berto, hit me on PM.. wanna ask about writers
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Done. Sent you my gchat/AIM/Skype

justo_tx said:
Damn, one of only about 4 people who's answer I would have been interested in reading.
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Hahaha yeah well I guess basically, anyone who knows their shit is going to frown upon this thread and won't answer in public. I need to build trust :)
 
Everything depends on your bankroll.

If you're just starting out, >200% is what makes sense because you want to grow and scale fast.

After you've gotten good <50% will work because you can compete in volume niches ... therefore increasing your overall net revenue.

It's a business, evaluate it as such.
 
Skype info sent to ya Berto... I'll give you more details there.

+1 to what Erect said though. Some of my $10/year domains earn me $300/year and I'm still not happy with it but it's not too bad in the scheme of things.
 
guerilla said:
Berto, hit me up on Skype.
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Bofu2U said:
Skype info sent to ya Berto... I'll give you more details there.

+1 to what Erect said though. Some of my $10/year domains earn me $300/year and I'm still not happy with it but it's not too bad in the scheme of things.
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C'mon guys there are a few of us who would like to hear your views on this!

Berto, I am always interested in how you and Efeezy are doing as you both seem to be non coders who concentrate on SEO - which is exactly my position

I have been in the fortunate position of having money put away to live on while I give this a business a proper go. Given that I try to reinvest all profits from one month in the next month, mostly through content and links (finding quality links is still an issue for me). Recently I have been spending a lot on multiple hosts and content to set up my own private seo network to link to my money sites

So at the end of the year I expect to have broken even but hopefully with a bunch of earning assets in place - but I guess my situation is a little different to most.
 
I am new in this industry and have player in this garden for a year now, but as we all had first months really bring any cash just expenses.

But once I got first stable income I calculated how much I need to pay my bills and some extra cash and everything else I have reinvested and this really is paying off. I am not paying for seo services as most of them really suck, so my strategy is to invest in content. Not some 2-3$ cheap articles but real things that people are willing to read and send to their friends. But this is not the point.

back to the topic. In short I am taking as much I need to pay bills, not to buy latest BMW, so I will be able to buy Bentley in long term. :)
 
As someone who works in local SEO (performing SEO for local businesses), my profit margin is similar to yours. Are you talking about selling SEO, or doing SEO for AM?

I think the important thing that you need to consider (and charge for) is your time. Your clients should give you a monthly budget for link building as well as a fee for your time, either hourly or retainer-based, as you are driving the SEO strategy of their sites that is keeping them from being sandboxed.

Let me know if you have more specific questions.
 
I always look back on past projects and am pissed that I didn't scale. It's good to manage risk, but being too cautious is just as bad as being too risky.
 
MAke sure you skype SoupyOne, too. He might have an ebook or course on SEO consulting profit margins by now.
 
seo is an industry full of people trying to sell you the future (ranks...)
the most precious asset of an seo is therefor experience.
can't buy history
 
I have always found my SEO investments to have by far the greatest ROI. All situations are going to be different but if you feel like your niche has an opportunity to scale then I would be very aggressive with your SEO spending. You can't beat passive income from a highly ranked competitive keyword.

Make sure your content is top notch though. No point spending a ton on backlinks if your content sucks. Even if it means paying more for high quality writers, it is WELL worth it in the long run.
 
Well, I haven't spoken to Bofu yet, but after meeting with the tax guy (i'm going to post some thoughts in the tax thread on that), I'm going to start dumping more stuff into more SEO campaigns.

I'm not yet ready to put this money into real estate, so I might as well put it back into the biz - and then hopefully 6-12 months, it comes to fruition and I can reconsider the real estate.

I got enough saved for whenever things go rotten (and you gotta assume at some point they will... so I'm gonna continue to diversify throughout my niche).

Thanks for the responses all. Time to get aggressive!
 
I like the Eli method.

Every site needs to pay it's own rent. As long as they're not a time sink, keep it. Ditch the ones that don't.

Don't be a fucking idiot and lower your profit margin. Leverage that extra money into expenses like new sites, trips to conferences that are deductible, the list goes on..
 
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