I and many others make our full-time living from building niche websites. I often talk about the benefits of this business and why my strategies are so successful. However, the truth is that as with any business, there are some very real risks that you should be aware of if you are going to get started building niche websites.
So, in my post today I want to tell you how it really is. Building an online business is risky, just like any other business. An online business is difficult and complex. Most people will not succeed at building niche websites. Even with the step by step guidelines I provide on my Niche Websites Hub, most people will not be able to turn those instructions into profits on a consistent basis. There are many reasons for that, but what I really want to talk about today are the risks associated with building a niche websites business.
Just to be clear, I am referring to niche websites that receive their visitors primarily through Search Engine Optimization (i.e. Google). Here are a few of the risks that I see with building niche websites:
- You could lose your rankings
- Google could deindex your sites
- Google could ban your Adsense account
- Advertisers could stop spending money online
- Google could drastically change its algorithm for ranking websites
- Search engines could become obsolete
Obviously, some of these are bigger risks than others; I will discuss further.
I have heard lots of “chatter” about what is the most risky part of owning niche adsense websites. And I am absolutely shocked that people believe that getting your Adsense account banned is the riskiest part of the business. Hogwash! I see this as probably the smallest risk associated with niche websites. The biggest risk in my opinion is that Google could change their algorithm and stop ranking your sites – this would be MUCH more devastating.
The source of your traffic is the key to your business NOT the advertising network you use. If your traffic gets shut off, you are done. If your Google Adsense account gets banned you can still do lots of things – try CPA offers, get advertisers directly (the same advertisers using adsense), find other ad networks, or simply get a new Adsense account by forming a new business entity. Its more of a nuisance than anything if your adsense account gets banned.
My Hot Dog Stand Analogy
Let me explain these risks with an analogy.
Lets say you own a hot dog stand and you have a permit outside a very busy stadium to sell hot dogs during all the big events. You sell the brand “Ball Park Franks”. So, is your source of revenue “Ball Park Franks”? Or is your source of revenue the foot traffic that walks by your hot dog stand during each big event? Obviously, the key to this hot dog business is the foot traffic. If you were to be banned from setting up your stand outside the stadium, your business would be done!
However, if you were banned (for some odd reason) from selling Ball Park Franks would this kill your business? No, absolutely not! You would just start selling Oscar Meyer Weiners and your customers wouldn't know the difference.
So, in this odd little analogy the Ball Park Franks are like Google Adsense. You make your money selling Ball Park Franks. In the same sense you make money with Google Adsense in the niche business. You can always make money in other ways – Google Adsense is just one way. Having your hot dog stand outside the popular stadium is like having a good position in Google. You get a bunch of free traffic because of your position. However, if you are no longer allowed to be at the stadium or if you are no longer allowed to be in Google your website is really in trouble.
Okay, I think I have made my point. If you think getting your Google Adsense account shut down is the risk of building niche websites then you are not really understanding this business. The real risk of this business is the SOURCE OF YOUR TRAFFIC!
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So, when people hear about my business model and say, “Aren't you scared that your Google Adsense account will get banned” – I just have to laugh because this is the LEAST of my worries. The real worry is that Google could change how their search engine works. Or perhaps even worse is the risk that people could stop using search engines the way we know it. Perhaps a new technology will emerge (mobile?) that will make search engines obsolete. These are the real risks that a business owner involved in building search engine optimized websites should be worried about.
6 Risks Associated with Niche Websites
So at the beginning of this post I mentioned 6 specific risks associated with building niche websites. Now in blue, I will list briefly what can be done about these risks if they are to occur to you.
- You could lose your rankings. Small risk. Try harder, build more links, and create better content. If this fails, start a new website in a different niche.
- Google could deindex your sites. Small risk. This is unlikely to happen unless you go against Google's Terms of Service. I had some sites deindexed and I recently discovered that it was due to a virus on one of my sites that had spread to others due to an outdated plugin. Spam email was being sent from my website – its a long story. Now I know to keep plugins and themes up to date!
- Google could ban your Adsense account. Small risk. I don't know anyone that this has happened to. I have been with Google Adsense for 5 years and have 200 websites. My account is in good standing. Just follow the Adsense terms of service and you should be fine. If it happens find an alternative revenue source or simply get a new Adsense account under a new business entity.
- Advertisers could stop spending money online. Small Risk. Okay, I'm embarrased to even have this listed! Of course they will keep spending money online – they are making too much money. This is where the advertising game is now…its all online! The only risk is that ad dollars will shift to a different platform or if the internet becomes outdated. This is a risk in the distant future…don't worry about it now. Just know that its there.
- Google could drastically change its algorithm for ranking websites. High Risk. Obviously we know that Google is constantly changing their algorithm. The Panda update affected 12% of all searches. Even so, it did not affect any of my own sites as far as I'm aware. Its certainly a risk that Google could change something that no longer ranks niche websites, but I'm optimistic that this won't happen any time so – if ever. Its a risk because the power is in Google's hands. However, Google's business is also hinged squarely on the purity of their search results. They have built a business on providing relevant results to everyone's search queries. So, it would be insane to think that they would drastically change their core business.
- Search engines could become obsolete. High Risk in the distant future. This will probably happen to some degree in the future. I don't know how or what will replace them, but it would be absurd to think that the internet will not evolve in the future beyond what it is currently. Perhaps everything will be mobile or some other technology will make search engines obsolete. I really don't know. But its a very real risk that you have to consider if getting into this business. Will this happen in a couple of years? Probably not. Will things have changed in 10 years? Probably. So, if you think you can build a website and have it generate passive income from search engine traffic for the rest of your life, you are sorely mistaken.
So, there you have it. I could go into much greater detail about the risks associated with building niche websites. However, I really just wanted to be up front with anyone considering getting in this business – ITS RISKY! This is not a “safe” business, its a very high risk business that also has potential for high rewards. I personally have taken a look at all the risks associated with this business and have made a judgement call and determined that the rewards are worth it to me. However, I am going in with my eyes wide open and not naive to the fact that my business model has inherent risks built into it. Many of you may feel differently, and that is just fine.
Overall, I love the niche websites business and hope to be involved in it for a very long time. But I would feel like I was not being completely honest with everyone if I didn't write this post and discuss the inherent risks involved in search engine optimization and niche websites. So, please be aware of what could potentially happen to your business and make your own judgement call as to whether this is the appropriate business for you.
What are your thoughts on the subject? Do you see any other risks that I didn't discuss? Are some of the risks that I mentioned smaller than I portray them to be? I would love to hear what you have to say!