In this guide we will show how to build an online directory business from scratch, whether you're a professional developer or if you don't have any previous experience with building your own websites.
What is an Online Directory?
An Online Directory is a website that provides organized information about companies, individuals, or websites.
If you are good at marketing and if you know how to build complex websites, then one of the easiest ways to make money online is by developing and owning online directories.
However, even people with no technical knowledge at all can succeed with their own online directory. We'll show you how in this guide.
The key to achieve success with an online directory is either to become the leader in your niche. If you know a lot about dog breeds why not create a directory of breeders in your local area. Afterwards expand slowly until you cover every breeder in your country.
How To Make Money From Online Directories
There are several ways to make money from online directories, but most relevant revenue sources are:
- Paid listings
- Advertising (banners, text advertising, video advertising, etc.)
We'll show you how to make money from your own online directory in this guide.
Project: Online Directory
To make $1,000 online from an online directory.
Time to implement
From days, to weeks, to months (Depending on whether you create the directory yourself/outsource the process, or if you're using a ready-made software). Don't expect to make a lot of money in the first months.
Less than $20 if you do everything yourself. About $200 if you buy directory software. Expect anything from $400 - $5,000 if you outsource.
Domain and hosting (more information below)
No particular skills required. However, knowledge of HTML and experience with building websites is an advantage.
What To Do
In this step-by-step guide I will show you how to successfully build your own online directory business. This is what we're going to do:
- Find a segment or niche
- Get hosting and domain
- Directory Software
- Add Content
- Get Traffic
- Get Advertisers
- Get Paid For Listings
- Defend and Expand
The goal with this guide is to help you create an Internet business by developing an online directory. The ultimate goal for this guide is for you to make $1,000 per day from one single directory (meaning you don't have to build a huge empire of online directories).
STEP ONE: Find A Niche Or Segment
There are thousands of directories or "Portals" out there that contains "just about everything" – don't make another one. Avoid making superfluous services, cause nobody will bother to use them. Instead, finda a niche or a market segment.
Niche or Market segment: The best way to succeed with an online directory is to pick a spesific market (Ex: Autos directory for your country, Home Office Directory) or even a niche (Ex: Exotic Aquarium Fish Directory, Tattoo Directory, Hairdresser Directory).
Don't create another directory that tries to cover any market out there (unless you have a lot of money, because the competition in the "Yellow Pages" and "Portals" industry are fierce and you would have to buy yourself in). You may further increase your chances of succees if you pick a market that you have great knowledge about.
Also, make sure the niche or market segment you choose is big enough to capitalize on. Do some research on your own, particulary find out how many companies that are in your market, and estimate how many of them are willing to pay for listings in a online directory (conduct surveys).
Pick something that interests you: Since I suggest you spend all your efforts building and maintaining only one directory, you should pick a market or niche that you find interesting.
STEP TWO: Get Hosting And Domain
You will probabaly need a hosting service that can handle a lot of traffic, as this is the key to be making a lot of money with online directories.
For this project we'd recommend the an hosting account with Bluehost, which is cheap considering you will get UNLIMITED bandwidth and unlimited domains (Go to Bluehost and see the "Shared" box, and click "Learn More" to buy an Swamp account).
For more information about hosting, see Hosting Services
STEP THREE: Directory Software
Some of you might ask... "How do I create a directory? I don't even know how to create a website".
There are several solutions, pick what is best for you:
- Build the directory yourself (I)
This is the best option for advanced users that know how to write advanced server side code (PHP, ASP, etc.). You should know MySQL, XHTML, CSS.
- Build the directory yourself (II)
If you don't know how to code advanced websites, there's an alternative solution if you insist on building your own directory from scratch. You could create a simple website based on simple HTML (and preferably CSS), and manually update the site. I wouldn't recommend this option though, as this will be very time-consuming.
- Outsource the development.
You don't have to know any programming at all. You can still have your own directory. If you need help to create the online directory website itself, simply outsource this part. See the bonus article Outsourcing your work for more information on outsourcing. You can get a good price if you find the right people to do the work for you. Even if you're a good programmer you might want to outsource certain parts of the directory project, as this will free up time for you to do more important tasks.
- Buy directory software
This final option is great if you don't know how to build your own directory (actually, most people don't have a clue about creating complex websites, so don't feel bad about it).
We have bought several directory scripts in the past, none of them was perfect, but at least they were okay with a little tweaking. You may want to do a search for "directory script". Here's a few scripts you could try:
- eSyndiCat - In eSyndiCat 2.2 they tried to realize the conception of "Perfect Directory Software". The truth is, it's not perfect. There are usability issues, and the original templates are not good at all, and some minor bugs. Despite of this it could be worth paying for. eSyndiCat has got a lot of feautures, and it would probably be more expensive to hire a programmer to create something similar.
- phpYellow - Not very good, needs a lot of tweaking, might still be worth it if you have the time and skills to improve the script.
- phpMy Directory - needs improvements. I would recommend that you hire a CSS designer which also happen to know a thing about usability, make him/her create a new design, the default template is not very nice, and the HTML code need improvements.
Decide wheteher you will create the directory website yourself, outsource it, or buy ready directory software. Once you've done that, it's time to fill your directory with content.
STEP FOUR: Add Content
A directory with no content (the listings) will not serve its purpose. Furthermore, you won't attract customers (those who for paid listings, and advertisers) if there is no content there to begin with.
Add the following content to your online directory:
Most directory scripts make it possible to add listings by filling in forms directly from the web browser. This is usually the best practice when adding listings to a directory. Furthermore, you should have one form for admins, and another for others that want to add their listings to your directory.
Start by adding a few hundred listings (or even better: several thousand listings, depending on the size of the niche/market) to your directory manually. Yes, this will take time. You will have alternatives though: Pay someone to add the content (outsource it to someone else), or use a scraper tool that collects information from similar websites (for example, get a scraping tool for a yellow pages website). Scraper tools will most likely need to be custom made, so if you don't know how to do it find someone that can do it for you at Elance or Rent-A-Coder (see outsourcing). Be aware of copyright laws when using such tools. You might need to modify some of the content afterwards.
Adding content to your directory is very time consuming, so we'd recommend outsourcing it or automate it (by using scraper tools) if you can afford it. Spend your time on more important tasks, such as developing a business plan and creating irresistible offers for your prospects.
You may also want to add affiliate offers directly in the listings. For example, if your directory is about cars, browse the CJ.com directory for autos affiliate programs, and use your affiliate links in the listings.
These listings are of course free, as you've added them withouth getting paid for it. Once your directory becomes popular, and you've got some paid listings, remove the free lisings or contact the respective companies and make them pay to stay listed.
The listings are the most important content of online directories. However, you could also add articles that are relevant and useful to your end users (the users that visit your website with the intention of using the directory for informational purposes, and not to use your directory for advertising). This is good both for SEO purposes while at the same time you're offering
Add Tools and Functions
This is optional, and might not even be worth the effort to some directories. You might want to add tools such as online bookmarking, user comments and ratings, "find on map" (Use Google Maps).
Add Commission Based Services
For example, if your listings have postal addresses in them, you could add services such as "Send a Gift" or "Send Flowers", and then connect these function with affiliate programs. If your listings have cell phone numbers or email addresses, use them for permission marketing purposes. The opportunities for commission based services in your directory are endless – use your creativity!
STEP FIVE: Get Traffic
Getting traffic to your directory is easy once you've added enough content. This is because content itself is the main source for targeted traffic.
Remember, you need to kinds of traffic:
- End-user traffic
- Traffic from customers (those who pay for listings)
You would want the end-user to visit your directory homepage and sub pages that are relevant for them. Create another page for your customers, where they can read about your directory, why they should buy listings there, and how they can buy listings (more about this below).
You can charge more money for your listings the momre end-user traffic you have. This is because the companies/individuals that have listings in your directory want a piece of the attention from these people, and your directory can give them what they want, and that's why they pay you.
Read more about how to get targeted traffic.
STEP SIX: Get Advertisers
Now you have a online directory with content and targeted traffic. Selling advertising such as banner ads and text ads (not listings) should be fairly easy once you have established good traffic.
Start by contacting the companies/individuals that are already in your directory. Ask if they want to advertise on your site.
Another great way to get advertisers is simply to create a section on your website where you write about the benefits of advertising in your directory.
STEP SEVEN: Get Paid For Listings
Again, the best way to get people to pay for listings in your directory is to create a section that describes the benefits of being part of your directory. Make it clear what they must give (how much it costs) and what they will get for what they pay. Be as spesific as possible, and don't hype it. Also, make it easy for your customers to add their listings.
What we're going to suggest now is a Foot In The Door (FITD) technique, and it works like magic. This is applied marketing psychology at its best. You start by asking for something small, and once you've got what you asked for you begin to ask for something bigger, until you get what you really desired.
- Start by offering free listings, for example: Get a free listing for ONE MONTH. That sounds great! So what do they have to do next?
- Make your customers fill out a form, and make them provide a lot of content for you (their contact information, description of their business etc.). You've asked for something small. After all, if your directory truly is worthwile then this is a great gift for any company. They get a free listing!
- Here's an idea to make more companies provide as much content as possible: Split the form over several pages. First page could be something as simple as Company name and the URL of their homepage. Then on the next page provide more options to fill in content, such as and a short description of ther company, opening hours, contact information, etc. You don't have to stop there. Make them upload photos and maps, and make them feel like they are really getting an amazing gift of free promotion here. We're talking ONE MONTH of free listings! You're really providing an irresistible offer here.
- Next, when they have gone through filling out all those pages, then make them create an listings account (the FITD principle). Most people are willing to do this as they've voluntary gone through a lot of hassle to get to where they are. The account should consist of a contact name (or user name), email address and password. I would also recommend that you get their permission to send them emails from you. Great, now you have their contact information. Keep that in mind for later. Provide a "create an account"-button at the bottom, and forward them to the next page.
- On the next page, provide them with payment alternatives. "Payment? But... I thought I was offered FREE listings for one month?" True. You will get them one FREE month if they pay for 6 months (meaning they will get listed in 7 months), plus if they are not satisfied with the results they get from the listing then you promise to refund their payment – a 100% money-back-guarantee. Most people will actually go on with this, afterall, they don't have anything to loose. Furthermore, you could tell them something like... You can get TWO FREE MONTHS if you pay for a 12 months, and ONE YEAR FREE if they pay for 36 months. Do some testing with a few customers, and find out what marketing technique works best.
- From our experience we've had the best results with recurring monthly payments. Once your customers agrees to pay for the first free month, make them agree to acceppt automated reccuring billing if they choose to keep their listings and continue the service. Make it possible to end their membership any time (this gives the customer perceived freedom, which often is good for business). You may also want to experiment with one-year recurring / quarterly recurring / 6-months recurring. For information on how to take payments online, see the bonus article Payment Alternatives.
- If some of your customers choose to discontinue the listing process before they make a payment, then don't worry. You have their contact information. Use it to force a sale for a listing. Theere's a saying that says that people need to be "sold to" seven times before they actually end up buying something. While this might not be presice I actually do believe there's some truth to this saying.
- Customers that have bought listings from you are inclined to buy other services from you as well. This has been proven in many studies, and it's also been confirmed by our own experience in Internet marketing. Use this knowledge to upsell your customers. Make them pay more for bold text, extra sub-pages, pictures, top listings, feautured listings, extra categories, etc.
Remember: Use the Foot In The Door technique when marketing your directory services to your prospects and current customers.
Create Your Own Affiliate Program
Affiliate Programs can be a great way to get customers your way. Now, this time you are not the affiliate, but the owner of the affiliate program. Say you share a 40% commission with anyone that brings a customer your way... For example, if a company buys a listing from you for $1,000 for one year, they get a one-time commission of $400. You could also provide life-commission if you provide recurring billilng to your customers: For example, if your customer is charged $500 per month for a listing, and if your commission is 10%, then your affiliates will get $50 every month (and you will make $450).
There are many ways to add affiliate programs to your directory, but this takes some technical skills. I could give you some pointers, but honestly, if you don't know how to do it yourself then simply outsource it by using Elance or Rent-A-Coder. Another option is to partner up with an affiliate network such as CJ.com, they will help you with the implementation. Do not sign up as an affiliate, but as an advertiser - this costs money, but this should be justified as your intention is to make more money by serving an affiliate program to a network of affiliates. Furthermore, if you decide to join an affiliate network be aware that you will have to share your revenue with yet another party (the operator of the affiliate network, for example CJ.com). The benefits though, are that your business will be seen by thousands of affiliates that are ready to promote your business.
STEP EIGHT: Branding
Branding is the key to enduring success for your online directory business.
Branding creates emotion, motivates the buyer, produces credibility, generates a clear message about your brand, and creates loyalty amongst customers
One of the greatest benefits you can achieve from branding your online directory is if some other company are willing to purchase and take over your directory. Identify strong brands in the online directory business, and become their strongest competitor – if this could make you an instant millionaire.
To learn about branding, read the bonus article Branding Yourself.
STEP NINE: Defend and Expand
What do I mean with defend and expand?
DEFENCE: Once you've made your first $100 on average per day for a week, then make sure it never drops below this again. Defend your income. Once you've made your first $1,000 on average per day for one month, make sure you don't drop below this point ever again. Once you've got a certain number of unique targeted visitors, make sure you never go beyond this point. Once you've reached top position for relevant keywords in the search engines, make sure you stay there.
EXPANDING: Now, you've taken care of defendig what you already got. Next thing to do is to try to improve things, make it better, expand all there is to expand. Increase your revenue, attract better advertisers that pay more, get more companies to pay for listings, drive more targeted traffic.
Once you've got your online directory business running, make sure you defend what you got, and then improve your position.
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